DALLAS -- Alon USA Energy Inc. has issued an update on the strategic review it undertook in April when it formed a special committee to look at a potential acquisition by Delek U.S. Holdings Inc.
In a new filing with the U.S. Securities and Exchange Commission (SEC), independent refiner and marketer Alon USA said it has made no decision about a Delek U.S. deal.
Alon USA's board of directors formed a special committee in April to review strategic alternatives, a potential business combination with Delek, an analysis of capital investments, shareholder distributions, a sale or merger and a spinoff or separation of a selected business. The committee is made up of directors having no affiliation with Delek U.S. Holdings.
In May 2015, Delek U.S. announced that it completed the acquisition of approximately 33.7 million shares, or approximately 48% of the outstanding shares, of Alon USA Energy common stock from Alon Israel Oil Co. Ltd. Representatives from Delek U.S. filled five seats on the 11-member Alon USA board previously held by Alon Israel representatives, including Delek U.S. chairman, president and CEO Uzi Yemin, who has been named as the chairman of the Alon USA board.
Prior to beginning negotiations with Alon Israel, Delek U.S. entered into a stockholder agreement with Alon USA, allowing Delek US to acquire up to 49.99% of the outstanding shares of Alon USA at its discretion, with additional ownership above this threshold subject to the approval of the independent members of Alon USA’s board. That stockholder agreement expired May 14, 2016, and Delek U.S. has no further restrictions under this agreement related to increasing ownership in Alon USA.
"The special committee has set no timetable for the strategic review process and has not made a decision to pursue any particular transaction, and there can be no assurance that any transaction will be approved or consummated," Alon USA Energy said in the SEC filing. "Alon does not intend to disclose or comment on further developments regarding the review of strategic alternatives until it determines that such disclosure or comment is appropriate or necessary."
The special committee has retained J.P. Morgan as its financial adviser and Gibson Dunn as its legal adviser to assist in the assessment of strategic alternatives.
Delek U.S., Brentwood, Tenn., is a downstream energy company with assets in petroleum refining, logistics and convenience-store retailing. The refining segment consists of refineries in Tyler, Texas, and El Dorado, Ark. Delek U.S. and its affiliates own approximately 62% (including the 2% general partner interest) of Delek Logistics Partners LP, a master limited partnership (MLP) focused on owning and operating midstream energy infrastructure assets. The retail segment markets fuel and merchandise through a network of approximately 360 company-operated c-stores under the Mapco Express, Mapco Mart, East Coast, Fast Food & Fuel, Favorite Markets, Delta Express and Discount Food Mart brands.
Alon USA Energy, Dallas, is an independent refiner and marketer of petroleum products operating primarily in the south central, southwestern and western United States. Alon owns 100% of the general partner and 81.6% of the limited partner interests in Alon USA Partners LP, which owns a crude oil refinery in Big Spring, Texas. Alon directly owns a crude oil refinery in Krotz Springs, La. Alon is the largest 7-Eleven licensee in the United States and operates approximately 300 c-stores that sell motor fuels in central and west Texas and New Mexico.
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